Medidata Solutions Inc (MDSO): Are Hedge Funds Right About This Stock?

What’s a smart Medidata Solutions Inc (NASDAQ:MDSO) investor to do?

To the average investor, there are many indicators shareholders can use to watch their holdings. A couple of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can beat the broader indices by a superb margin (see just how much).

Equally as useful, bullish insider trading activity is a second way to look at the world of equities. Just as you’d expect, there are plenty of stimuli for an executive to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).

Keeping this in mind, it’s important to discuss the newest info surrounding Medidata Solutions Inc (NASDAQ:MDSO).

What have hedge funds been doing with Medidata Solutions Inc (NASDAQ:MDSO)?

In preparation for the third quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 9% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly.

Out of the hedge funds we follow, Drew Cupps’s Cupps Capital Management had the most valuable position in Medidata Solutions Inc (NASDAQ:MDSO), worth close to $36.9 million, accounting for 2.9% of its total 13F portfolio. Sitting at the No. 2 spot is Alex Sacerdote of Whale Rock Capital Management, with a $21.4 million position; the fund has 4.8% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Donald Chiboucis’s Columbus Circle Investors, Richard Driehaus’s Driehaus Capital and Spencer M. Waxman’s Shannon River Fund Management.

With a general bullishness amongst the titans, specific money managers have jumped into Medidata Solutions Inc (NASDAQ:MDSO) headfirst. Cupps Capital Management, managed by Drew Cupps, created the most valuable position in Medidata Solutions Inc (NASDAQ:MDSO). Cupps Capital Management had 36.9 million invested in the company at the end of the quarter. Alex Sacerdote’s Whale Rock Capital Management also initiated a $21.4 million position during the quarter. The following funds were also among the new MDSO investors: Donald Chiboucis’s Columbus Circle Investors, Richard Driehaus’s Driehaus Capital, and Spencer M. Waxman’s Shannon River Fund Management.

How are insiders trading Medidata Solutions Inc (NASDAQ:MDSO)?

Insider buying made by high-level executives is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, Medidata Solutions Inc (NASDAQ:MDSO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Medidata Solutions Inc (NASDAQ:MDSO). These stocks are Computer Programs & Systems, Inc. (NASDAQ:CPSI), Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), Quality Systems, Inc. (NASDAQ:QSII), MedAssets, Inc. (NASDAQ:MDAS), and WebMD Health Corp. (NASDAQ:WBMD). This group of stocks are in the healthcare information services industry and their market caps are similar to MDSO’s market cap.